Waterfront #2 2015: Always something new out of Africa

ANALYSIS
AFRICA: GROWING THIRSTIER
TEXT | anton earle PHOTO | istock
The economic, demographic and political landscape in Africa has
changed dramatically in the past few decades. Water management is
central to this new African era, writes Anton Earle in this analysis.
Writing in the third century BC, Aristotle discussed
the seemingly wild melange of animals unique to
Africa; suggesting that the lack of water forced
animals to congregate at watering holes, prompting
the evolution of hybrid species. Today we know that
Africa is the origin of all humans, with waves of
emigration over the millennia populating the other
continents. The irony is that while human society
emerged in Africa the more recent interaction of the
people living in Africa with those who left has been
an acrimonious one.
A special report by the usually sober Economist
newspaper in 2013 was boldly titled “Emerging Africa:
a hopeful continent”; and concludes that “despite
all the caveats, the Africo-pessimists have got it
wrong. This time the continent really is on the rise”.
African economies now rank among the fastestgrowing
in the world and reforms in laws and
institutions made over the past two decades
are bearing fruit with several countries seeing
improvements in social development indicators,
accompanied by the nascent emergence of an
African middle class. The positive news of socioeconomic
development is tempered by the impact
on environmental resources, water being prime.
Projections on climatic change show that Africa is
the continent likely to experience the greatest
impacts, with an increase in precipitation variability
leading to floods and droughts across vast areas.
Water management is central to this new African
era. Decisions on who gets how much water, how
discharges from industries, agriculture and urban
areas are managed and how investment is made in
water infrastructure will increasingly facilitate or
constrain the projected “rise of Africa”. To understand
the future of freshwater resources and service
provision in sub-Saharan Africa it is necessary to
consider the implications of three shifts affecting
the continent, namely economic, demographic,
and political.
Of the ten countries enjoying the highest rates of
economic growth globally from 2011 to 2015 seven
are in Africa and the average rate of GDP growth on
the continent is now the highest in the world at just
over five per cent annually. Of more importance is
the sustained nature of this economic growth over
the past decade, with low inter-annual variation
(African economies were little affected by the 2008-
2010 global financial crisis). According to the World
Bank 22 of the 47 sub-Saharan African economies
are now classified as middle income or above,
potentially allowing them access to domestic as
well as international capital markets for financing
of infrastructure projects.
Beyond the magnitude of the economic growth
figures it is also important to look at a shift in the
composition of that growth. Until around 2000
growth rates of African economies tracked
commodity prices closely as a consequence of
the reliance on mining, oil and other extractive
industries. Since then there has been a decoupling
of economic growth from commodity prices,
meaning that despite a 50 per cent drop in the oil
price over the past year oil dependent economies
such as Angola and Nigeria have continued to grow.
Zambia was previously largely dependent on copper
exports, but even though the price of the metal has
dropped sharply over the past year the economy is
predicted to expand by over seven per cent in 2015.
Growth in its financial services sector hit 12 per
cent in 2014. Agriculture and extractive industries
still account for the largest share of economic output
across the continent, but growth in sectors such
as financial services, manufacturing, construction,
tourism and telecoms exceeds the rate of overall
GDP growth. A decade ago almost all foreign
direct investment (FDI) went to the resource-rich
economies in Africa and although they still
attract the bulk of FDI the increase in the share
destined for resource-poor economies is increasing
more rapidly.
The second shift is in the realm of demographics.
With a population of over 1.1 billion, Africa is today
the second most populated continent. The sub-
Saharan population is over 900 million and growing
at a net rate of 2.7 per cent a year, the highest in the
world (global rate is 1.2 per cent, south Asia 1.3 per
cent and the MENA 1.7 per cent). The population
10 WATERFRONT # 2 | may 2015